- AUD/USD firming up as Dollar slides and takes up as the weakest currency on the board.
- RBA is in a position to cut rates, its just a question of timing.
AUD/USD is currently trading at 0.6866, pretty much flat on the day having travelled between 0.6830 and 0.6869, +0.03% while the dollar has now taken over the weakest slot of the majors in trading for the day. Markets are in a state of flux and we are seeing that reflected in the price action in the spot FX space. There is no consistency in trend one way or the other – even USD/NOK and USD/CAD struggle to make a run of it to the downside as the price of WTI sinks back below 60 the figure. We are waiting to hear a statement from the Saudi oil minister, expected any time soon.
RBA getting set for a rate cut
Meanwhile, the minutes of the Reserve Bank Board’s September meeting contained very little new for markets to go on but did come across a touch more dovish than expected which weighed on the Aussie – Indeed, it sounds as though the central bank is getting closer to its next move on policy. The minutes warned, “developments in the international and domestic economies, including the labour market” will be assessed to see whether a further easing of policy is “needed”, Westpac explained said. The analysts said they continue to predict cuts in the cash rate of 25 basis points in both October and February next year.
Analysts at TD Securities, however, argued that the RBA would be clearly disappointed that following 2 rate cuts and tax cuts, we have not seen more signs of green shoots. “We stick to our Nov call for the RBA to cut but if we get a poor jobs print on Thurs, then a move next month should be more a 50/50 proposition, not ~30% as it is currently. The fact that the RBA removed ‘the accumulation of additional evidence’ suggests the bar to cutting may have been lowered.”
AUD/USD levels
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